From From Peoples into Nations: A History of Eastern Europe, by John Connelly (Princeton University Press, 2020), Kindle pp. 595-597:
Kádár’s ethos of making life better had consequences for Party elites as well. Under Rákosi, they had rewarded themselves with vacation houses, special stores, and innumerable perquisites. Kádár cut those back, and now even top leaders relied on the Hungaria-Balaton Tourism and Holiday Company to get rooms in summer houses. Kádár called this policy “strengthening Communist morals.” Functionaries lost the privilege of traveling with 50 percent reduction on state railways and could no longer use state automobiles and telephones for private purposes. Thus, party power was restored but there was no return to the Stalinist status quo ante. More consumer goods became available, and living standards rose by a third from 1957 to 1960. Beginning in the early 1960s, televisions, washing machines, and refrigerators became commonplace, and average wage-earners lived in much greater comfort and security than did their parents or grandparents.
This non-nationalistic, consumption-oriented program also matched Hungary’s specific national predicament. Kádár reckoned that after decades of being called to sacrifice for great causes—the Nazi enterprise of saving Europe and then the Soviet one of propelling humankind into a utopian future—Hungarians were ready for things more tangible. Socialist society was being built, not for the sake of ideology, he assured the population, but “because it ensures a better life for the people, and that the country and the nation will flourish.”
To make this strategy succeed, Hungary’s Communists turned their attention to economic reform more seriously than comrades did elsewhere, over a longer period, with greater consistency and support from the top, despite objections from Moscow, and even during upheavals in other states. Socialist states had grown their economies rapidly in the early 1950s by introducing underused resources to production, especially raw materials and labor, but by the 1960s, those avenues were becoming exhausted. Now industrial growth would depend on increased productivity and technical development. The challenge of slower growth was felt keenly in the Soviet Union, given Nikita Khrushchev’s bold pronouncement of October 1961 that the Soviet Communist Party would attain “over the next 20 years a living standard for the people that will be higher than that of any capitalist country.” “For the first time,” he said, “there will be a full and final end to the situation in which people suffer from shortage of anything.” (See Tables A.5 and A.6 in the Appendix.)
Hungary faced severe disequilibrium. It had mounting debts to countries outside the Soviet Bloc, going from 1,600 million forints in 1959 to 4,100 million in 1963, and its debt-servicing commitments to those countries exceeded the value of its exports to them. More than 80 percent of the growth in debt involved short-term credits that expired within three months and had to be constantly refinanced. The sum of repayment obligations was more than twice as large as the foreign exchange earnings exports could cover.
Pressure for changes was strongest in agriculture, because Hungarians spent most of their money on food and because the quality of diets had dropped sharply under Stalinism. The completion of collectivization by 1961/1962 had only aggravated matters: in the following half-decade, food production barely reached the average of 1958/1959. The time of coercing people to join cooperatives was over. Now the party had to ensure that they worked effectively and conscientiously.
The response was to strike out in a direction where no socialist society had gone. Perhaps stretching the truth, Kádár claimed in 1960 that Khrushchev had said each socialist country had the primary duty of satisfying its own grain requirements, and the Soviet Union would not bail them out in case of shortfalls. Two years later, Kádár told fellow party leaders that other socialist countries had taken paths of coercion that Hungarians should not follow; he was delighted that Hungary had not done “the kind of thing the Bulgarian comrades did,” or for that matter, the East Germans or Czechs. Forced collectivization in East Germany had driven tens of thousands to the West. As his listeners knew, that outflow had led to the construction of the Berlin Wall, probably the greatest public embarrassment for the East Bloc in its history.
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